China hauls EU to WTO in shoe tariff dispute

GENEVA 
China launched an unfair trade case against the European Union on Thursday, accusing the 27-nation bloc of imposing illegal duties on Chinese shoes, the World Trade Organization said.

The dispute concerns an EU decision in December to extend trade charges on Chinese and Vietnamese leather shoes by 15 months to protect European shoemakers.

China has complained about the antidumping duties, which it says are protectionist and damaging to free trade. European importers and retailers had also called for an end to the charges, saying they cost shoppers millions of euros (dollars) each year.

The EU charges "violated relevant rules of the WTO and hurt the legitimate rights and interests of Chinese companies," said Yao Jian, a Chinese Commerce Ministry spokesman.

Beijing raised its concerns with Brussels in several rounds of negotiations, but the talks "never solved the concerns of the Chinese side," Yao added.

Its official complaint initiates a 60-day consultation period, after which Beijing can ask the WTO to establish an investigative panel. If the WTO rules against Brussels, it can authorize China to target European goods with higher tariffs or other penalties in retaliation, though cases generally take years to reach that point.

The European Union introduced the trade charges in October 2006, claiming European producers were being harmed because Chinese and Vietnamese rivals were illegally selling shoes below cost in Europe.

The fees "are about fighting unfair trade," Clancy said, citing "clear evidence that dumping of Chinese products has taken place and that this is harming the otherwise competitive EU industry."

However, shop owners and some shoe brands say they are the real victims because the charges forced them to pay more for the vast number of shoes now made in China.

"Ironically, the measure hurts European business and consumers the most," said the European Footwear Alliance, which represents Timberland, Ecco, Hush Puppies and Adidas, and estimates that EU consumers and businesses could lose hundreds of millions of euros through 2011.

It says the charges could generate euro1 billion ($1.4 billion) in tariffs, without helping Europe recoup lost manufacturing jobs because shoes from China and Vietnam are now being replaced by imports from other emerging countries.

The charges add between 9.7 percent and 16.5 percent to the import price of Chinese shoes and 10 percent to Vietnamese shoes.

But the EU says the extra fees haven't hiked consumer prices or damaged distributors' "healthy" profits, noting that the price jumps less than euro1.50 for shoes that sell for euro50. That's because the average import price is euro9.

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AP Business Writers Joe McDonald in Beijing and Aoife White in Brussels contributed to this report.